Background
SDG&E filed its application March 8, 2002, requesting Commission approval of PPAs with the MM Projects, and a Motion for a Protective Order to preserve the confidentiality of certain information in the PPAs, including energy prices, dates, and certain other commercial terms. SDG&E asserts these facts should remain confidential since they contain commercially sensitive competitive information, the public disclosure of which would harm the MM Projects and their affiliates.1 SDG&E also filed a public version of the PPAs that redacts the energy prices, dates and certain other commercial terms. SDG&E requests expedited ex parte Commission action under Rule 15(d).2
SDG&E states that the PPAs were negotiated during the final quarter of 2001 and early 2002 as the MM Projects were anticipating the December 31, 2001 expiration date of their Uniform Standard Offer No. 1 (USO1) contracts approved in Decision (D.) 96-10-036. SDG&E currently purchases power from the MM Projects under the terms of a temporary "Bridging Agreement" negotiated by the parties to facilitate continued power deliveries during negotiation of new PPAs. Under the Bridging Agreement, which expires June 30, 2002, energy is purchased at short run avoided cost (SRAC) prices, subject to a cap. SDG&E requests that the Commission approve the terms and conditions of the new contracts, and allow SDG&E to recover its full costs for purchased power under the contracts, subject to SDG&E's prudent administration of the contracts.
SDG&E contends the PPAs will provide an additional QF power source and provide SDG&E ratepayers with benefits of QF power at significant savings over the price using the Commission's SRAC pricing formula. SDG&E estimates that based on the past average performance of the MM Projects, projections of natural gas prices and projected output, the savings would be 47% compared to SRAC energy prices and capacity payments made under USO1 contracts. These estimates include a minor escalator that takes effect during the term of the contracts.
On April 15, 2002, the Office of Ratepayer Advocates (ORA) filed a Motion for Leave to File Attached Response under seal.3 ORA's Response questions the amount of savings projected by SDG&E and the amount of the price escalator incorporated into the PPAs, and requests clarification from SDG&E regarding SRAC forecasts and line losses. ORA states that if these issues are clarified by SDG&E then it does not oppose SDG&E's request.
SDG&E filed a reply to ORA's Response, under seal,4 on April 26, 2002. SDG&E's reply addresses each of ORA's concerns and comments on the value of projected savings, including capacity values, the price escalator, and the impact of line losses on SDG&E's calculations.
Both SDG&E and ORA agree that the instant proceeding should be classified as ratesetting, and that there is no need for evidentiary hearings as there are no material facts in dispute.
On May 3, 2002 the assigned Administrative Law Judge (ALJ) issued a ruling requesting SDG&E to provide information regarding its economic analysis of the potential customer benefits of the PPAs including forecasted natural gas prices that support SDG&E's statement that the contracts provide a significant benefit to ratepayers. On May 23 SDG&E filed its response to the ALJ's May 3 ruling, including a motion that the response, an analysis of ratepayer benefits, be filed under seal.5
1 Public disclosure of this information may also harm SDG&E and its ratepayers. 2 All references are to the Commission's Rules of Practice and Procedure unless otherwise noted. 3 This motion is unopposed and we grant ORA's motion to file under seal. 4 This reply should remain confidential consistent with the ALJ's ruling on April 12, 2002 granting in part SDG&E's motion for protective order. 5 This motion is unopposed and we grant SDG&E's motion to file its Analysis of Ratepayer Benefits, including the Attachments, under seal.
